Development plans for Calgary North Hill Sears location

Mario Toneguzzi, Calgary Herald06.26.2014

Sears Canada announced Monday it has entered into an agreement to redevelop a 12-acre site at North Hill Shopping Centre. The project, if approved, would include residential highrises and potential for a retail component.

CALGARY - Sears Canada Inc. announced Monday it has entered into a binding agreement with Concord Pacific Group of Companies to pursue the development of the 12-acre Sears site at the North Hill Shopping Centre in Calgary.

Closing under the agreement is conditional upon satisfaction of conditions such as site investigations and obtaining the approval from the City of Calgary for the project, which are expected to take some time, said Sears in a news release.

It said the vision of the redevelopment is an infill project consisting of residential highrises, with a potential retail component. Last year, Concord entered into a similar agreement with Sears regarding the retailer’s land adjacent to its store at Metropolis at Metrotown in Burnaby, B.C.

“Sears has been part of the Calgary landscape since 1958 and we are excited about the possibilities for the North Hill site as conceptualized by Concord and Sears,” said Doug Campbell, president and chief executive of Sears Canada, in a news release.

“We plan to continue operating our store at North Hill as we have for almost six decades and seeing this new development adding positively to the landscape and economy of Calgary. We look forward to working together with Concord and moving the project forward.”

Sears said the arrangement contemplates the sale of a 50 per cent interest in the site for a value of about $15 million, subject to adjustments, and the retention of Concord on customary terms to manage most facets of the development. Following the transfer of the 50 per cent interest, the parties would enter into a co-ownership joint arrangement. If third party debt financing cannot be obtained, Concord, and not Sears, will be responsible for providing debt financing to develop the project, it said.

“Sears reminds the public that, given the very early stage the project is in today, there has been no determination as to capital or other expenditure required, if any. In addition, it is too early to tell whether or not the project will be completed given a multitude of potential factors, both internal and external, such as the economic value to the Company, obtaining approval of the project from the City of Calgary, shifts in the Canadian economy, and the condition of the real estate market now or in the future, during this multi-year endeavour,” it said.

“The location (for the residential development) fits very well into the future demand curve in the city,” said Don Campbell, senior analyst with the Real Estate Investment Network. “As Calgary continues to grow and at the same time attract a younger than average cohort from across the country, the style and location of properties will continue to shift.

“They will be demanding access to transit and access to restaurants, stores and services, which North Hill has. It, being close to the university and SAIT, also is a plus for property demand in the area. Combine that with being up out of potential flood zones, and future city, valley and mountain views. Frankly, I am surprised this hasn’t been built before.”

Vincent Power, spokesperson for Sears, said the company owns the North Hill site and the current Sears store will remain with not plan to change that at this time.

Sears has been at that location since 1958.

“This was Sears first physical presence in Calgary and one of the first “A” stores in all of Canada,” he said. “We serviced Calgarians since we first became a company in 1953, but until 1958 through mail-order Catalogue only. In 1958, we opened North Hill, and this was a huge major, at that time, suburban, store, the first of its kind in Calgary and, in fact, one of our first such stores in all of Canada. We employ 150 people at the North Hill store today.”

The company has three full-line department stores in Calgary at North Hill, Marlborough and SouthCentre. It also has three Home stores specializing in furniture and major appliances as well as one Appliances and Mattresses store. Its Western Canada National Logistics Centre, is a major distribution centre for Sears in Calgary and it is opening a new distribution facility for small Catalogue-Online parcels this summer which will service Western Canada.

In Calgary, Sears employs more than 800 people.

Calgary Councillor Druh Farrell said she couldn’t imagine a better partner for Sears on a residential development for this site than Concord Pacific.

“Concord Pacific has a good reputation of building high quality communities. So they don’t just build the buildings, but they also look at the public realm and how that fits in with the neighbourhood and there’s so much potential for this site and the interaction with the neighbouring communities,” she said.

“That site has gone through several iterations. We started planning it along with the Brentwood transit-oriented development years ago but there was no interest . . . It’s a remarkable location, well-situated with some of the best views in the city. It’s connected to transit. It’s linked to major corridors.”

Earlier this month, Vancouver-based Concord Pacific announced it would be developing its first project in Calgary - a luxury condo development in Eau Claire, along the Bow River, which it said will be the best engineered flood and emergency prepared residential building ever designed in Canada.

The Concord, which will have more than 200 luxury homes on two towers, will include a $13-million penthouse, at 6th Street and 1st Avenue S.W. near the Peace Bridge. The first tower is expected to be completed by the fall of 2017.

Concord Pacific is Canada’s largest urban community developer with more than 20,000 residential units built or currently under development in Canada.

Suites in The Concord will range from 1,061 square feet to 6,161 square feet. Prices start at $1 million to $2 million with the top Estate Penthouse close to $13 million. There will be a limited selection of two-bedroom premium suites starting from the $700,000’s.

mtoneguzzi@calgaryherald.com

Twitter.com/MTone123

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